Compound Interest Calculator
See how your savings and investments grow in GBP with compound interest. Add optional monthly contributions, choose compounding frequency, and view yearly breakdowns and a growth chart. Ideal for UK savings, ISAs and long-term planning.
Disclaimer: This calculator is for educational and illustrative purposes only. It does not constitute financial advice. Results assume a fixed interest rate and regular contributions; real returns vary. For regulated products, check the FCA register and speak to a financial adviser if needed.
Your figures
Future value
£44,358.29
Investment growth over time
Yearly breakdown
| Year | Interest | Accumulated interest | Balance |
|---|---|---|---|
| 0 | £0.00 | £0.00 | £10,000.00 |
| 1 | £451.91 | £451.91 | £12,851.91 |
| 2 | £568.10 | £1,020.01 | £15,820.01 |
| 3 | £689.02 | £1,709.03 | £18,909.03 |
| 4 | £814.88 | £2,523.91 | £22,123.91 |
| 5 | £945.85 | £3,469.76 | £25,469.76 |
| 6 | £1,082.17 | £4,551.93 | £28,951.93 |
| 7 | £1,224.04 | £5,775.97 | £32,575.97 |
| 8 | £1,371.69 | £7,147.66 | £36,347.66 |
| 9 | £1,525.35 | £8,673.01 | £40,273.01 |
| 10 | £1,685.28 | £10,358.29 | £44,358.29 |
What is compound interest?
Compound interest is interest calculated on your initial amount and on the interest already earned. So you earn “interest on interest”, which makes your money grow faster over time than simple interest (where interest is only on the original sum). The longer you save and the higher the rate, the more powerful the effect—which is why starting early and saving regularly in the UK (e.g. in savings accounts, cash ISAs or pensions) can make a big difference to your long-term wealth.
Formula (lump sum, no contributions):
A = P(1 + r/n)nt
Where A = future value, P = principal, r = annual rate (decimal), n = compounding periods per year, t = time in years. Source: standard financial mathematics; see e.g. FCA and educational resources on savings and investments.
How our calculator works
We use the standard compound interest method with optional monthly contributions. Our assumptions:
- Regular contributions stay the same over the whole period (unless you change the inputs).
- All interest is reinvested (no withdrawals).
- The interest rate does not change.
- No fees, taxes or product charges are included—check your own product terms.
The “effective annual rate” is the equivalent yearly rate when interest is compounded more than once per year. “Time to double” is how long it would take your money to double at the chosen rate and frequency. The inflation adjustment shows the future balance in today’s purchasing power (today’s pounds).
“My wealth has come from a combination of living in America, some lucky genes, and compound interest.”— Warren Buffett
Compound interest in the UK
In the UK, compound interest applies to many everyday products:
- Savings accounts — Banks and building societies pay interest (often monthly or annually); that interest can compound if left in the account.
- Cash ISAs — Tax-free savings where interest compounds; check current limits and rates.
- Stocks and shares ISAs and pensions — Investment returns can compound over time; capital is at risk and returns are not guaranteed.
- Bonds and fixed-term accounts — Interest may be paid at maturity or periodically and can be compounded depending on the product.
This calculator uses GBP only and is for illustration. For regulated products and advice, see the FCA consumer pages and consider speaking to a financial adviser.
Making compound interest work for you
- Start early — Time in the market increases the effect of compounding. Even small amounts can grow significantly over decades.
- Pay in regularly — Monthly contributions (as in our calculator) can boost the end balance and get more of your money into a compounding environment.
- Consider compounding frequency — All else equal, more frequent compounding (e.g. monthly vs annually) gives a slightly higher effective return; our calculator shows the effective annual rate.
- Use tax-efficient wrappers where suitable — ISAs and pensions can make compounding more efficient by sheltering returns from tax. Rules and limits apply; check gov.uk and your provider.
Frequently asked questions
What is compound interest?
Compound interest is interest on your initial amount plus on previously earned interest, so your balance grows faster over time than with simple interest.
What is the compound interest formula?
For a lump sum: A = P(1 + r/n)^(nt). We extend this with regular contributions in our calculator using the same compounding frequency you choose.
What is a good compound interest rate in the UK?
Rates change. Easy-access and fixed savings often quote AER (annual equivalent rate). Check comparison sites and your bank; investment returns are not guaranteed.
How does inflation affect compound interest?
Inflation erodes purchasing power. Use our inflation adjustment to see the future balance in today’s pounds.
Where can I use compound interest in the UK?
Savings accounts, cash ISAs, stocks and shares ISAs, and pensions all benefit from compounding. Always check product terms and seek advice if needed.
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